OPEC

With the replacement of “Qatar Energy” by the Russian “Novatek” in the consortium consisting of the French “Total” and the Italian “Eni”, the scene of oil and gas exploration in the Lebanese blocks No. 4 and 9 has been completed. Delimitation of maritime borders Southern Lebanon to appear in terms of reassuring international investors, while attention is directed to the end of this year and the first quarter of 2024 at the very least to explore the size of the available quantities, and whether they are characterized by a commercial dimension.

signing in Beirut

On Sunday, January 29, caretaker Prime Minister Najib Mikati sponsored the signing ceremony of the agreement between Qatar Energy and Qatar Energy.Total Energies and Eni for exploration and drilling for oil and gas in Blocks 4 and 9. The Qatari side was represented by Minister of Energy Saad Al-Kaabi, Minister of Energy and Water of Lebanon Walid Fayyad, CEO of “Total Energy” Patrick Botany and CEO of “Eni” Claudio Dispazi. The agreement distributes the shares among the three parties as follows: the share of “Qatar Energy” is 30 percent, the share of “Total Energy” is 35 percent, and the share of “Eni” is 35 percent. Mikati considered that “Lebanon’s geographical location will enable it to play a pivotal role alongside the friendly country in supplying gas to Europe.”

Butanih, a Total official, confirmed that the process will start with an environmental impact study in the third quarter of this year, that is, before the end of September, after which the drilling process will start, and it will continue for three or four months to find out the expected quantities at the end of 2023 or the beginning of 2024. Either Dispazy, representative of Eni, expressed his optimism that gas could be found for reasons related to the team and partnership with Qatar Energy and Total, because they represent the best companies on the global level.

On the other hand, Lebanese Energy Minister Walid Fayyad responded to a question about the guarantee against waste and corruption, and said, “We are talking about global partners, who have allied themselves in an alliance that is very keen on honest work financially, economically, and developmentally,” adding, “I have every confidence that this partnership will not include any Waste of national wealth and public money. For his part, Qatari Minister Saad Al-Kaabi explained that “Qatar Energy” joined the work in Blocks 4 and 9, and it was remarkable that he focused on Block No. 9, because Block No. 4 had already undergone drilling in it, and “Total Energy” was not successful in finding quantities Commercial, as for Block No. 9, its fate will be determined through the first well. In the event of successful quantities, there may be other points within the block that must be explored.

Qatar instead of Russia

In 2013, Lebanon attempted to launch its first gas and oil exploration operations, but it was actually delayed until 2017 due to political instability, until the consortium “Total”, “Eni” and “Novatek” obtained the right to do so within Lebanon’s exclusive maritime economic zone. However, the Ukraine war in February 2022 placed the Russian company under the brunt of Western sanctions, and constituted an obstacle to continuing work in a regular and safe manner for the “consortium” and Lebanon. In September 2022, Novatek withdrew and gave up its 20 percent stake to the Lebanese government. On October 27, 2022, Lebanese President Michel Aoun signed the maritime border demarcation agreement with Israel, after negotiations began in 2020 with American mediation by Amos Hochstein. The agreement recognized Lebanon’s sovereignty over the Qana field located within Block No. 9, which has an area of ​​1,142 square kilometers, in return for Israel obtaining compensation from the “operator of Block No. 9”, that is, the members of the “consortium”, as it considers that part of the field is located outside the waters. Lebanese regional.

What about other blocks?

The consortium aims to explore Blocks 4 and 9Note that the number of Lebanese blocks is 10, extending off the Lebanese coast. Al Ain remains on the southern block No. 9 because it constitutes a test of the strength of the agreement to demarcate the southern maritime borders on the one hand, and on the other hand because Lebanon previously announced in April 2020 that the priority drilling operations in Block No. 4, with an area of ​​1,911 square kilometers, proved that there is Traces of gas, but not in commercial quantities, i.e. not commercially viable reserves.

Diana Al-Qaisi (an expert in the field of energy) explains that exploration was limited to these two blocks because the companies won their licensing round in 2018. She explains that there is no guarantee of re-drilling and exploration in Block No. 4, and the “consortium” confirmed that “the work will initially be limited to Block No. 9, but the fate of Block 4 must be decided in order to re-excavate, or the companies will abandon it and return the share to the Lebanese state.

Al-Qaisi confirms that “the indirect demarcation agreement and the framework agreement between (Total) and Israel does not guarantee that subsequent tensions will not erupt, or obstacles will arise. Because the agreement provided for Israel’s approval of the company that will replace (Novatek), and it also assumes a re-settlement between Israel And the (Total) company to determine the share of Israeli profits in light of the results of exploration in the area south of line 23,” describing what is happening by postponing the problem.

Al-Qaisi commented on the approach of the Lebanese Minister of Energy, Walid Fayyad, who considered that the reputation of the components of the “consortium” internationally is sufficient to ensure that there is no waste, and believes that it does not constitute a guarantee that public money will not be wasted because the real guarantee is the application of the law and the establishment of a sovereign fund that guarantees that the funds resulting from the sale of energy will not be stolen. on him.

Al-Qaisi touches on the “time span for exploration, exploration and extraction,” indicating that “Total” will solicit offers to bring in a drilling rig ship to start drilling, and this will happen in the last quarter of 2023. She reveals that “there is a ship coming to initiate geological surveys at the drilling site within the field.” Then it studies the environmental impact in that area, and its work continues for a month or two. At the end of it, it draws up a report that is referred to the Petroleum Administration in Lebanon for review, and then grants “Total” company permission to start drilling. In light of that, the ship starts drilling (at the end year), and it takes two to three months to see the results, at which point it “goes on, or stops.”

As for the remaining eight blocks, Al-Qaisi notes that Lebanon has launched a second licensing cycle that ends in June 2023, in order to solicit offers for gas and oil exploration in them.

Al-Qaisi explains the expected future path. In the event that commercial quantities are found that secure profits for companies and the Lebanese state, a development plan for the sector must be drawn up. The matter requires more drilling, exploration and marketing work that consumes about two years in order to secure the market, pointing out that “gas, unlike oil, must be promoted and sold before it is extracted.” After that, the facilities must be built to liquefy the gas and sell it. From here, she expects that “it will take at least four years if everything goes well without any delays or obstacles.”